A junior trader is a person who helps a licensed broker process securities trades on behalf of clients. A securities license from a regional or national regulatory board is required to become a junior trader. Many firms hire junior traders who have the academic credentials to advance to senior trader positions in the future. Anyone interested in becoming a junior trade should consider pursuing a college education because senior trades typically have advanced degrees.
Traders are responsible for purchasing and selling securities such as stocks and bonds on behalf of institutions and individuals. Traders in most countries are required law to have current securities licenses. When a candidate attends a securities training class or completes a certain number of hours of online or classroom study, the licensing process usually begins. Candidates must pass an exam administered securities regulators after studying the materials. People who pass the exam can purchase a securities license for a fee, and anyone who wants to work as a junior trader must have this license before applying for a job.
Junior traders can process trades involving almost any type of security, but some start out selling mutual funds to gain experience. Traders must first obtain a fund-trading license, which banks and insurance companies frequently pay for existing employees to obtain. Without having to pay for the training class or the license with their own money, aspiring junior traders can obtain their first securities license and some trading experience. Because stock and bond trades are more complicated than mutual fund trades, many investment firms prefer to hire people who have worked as mutual fund sales agents in the past.
Junior traders often complete the actual paperwork for these transactions, while senior traders solicit sales and provide investment advice to clients. Anyone interested in becoming a junior trader should have good administrative skills and a basic understanding of math. Although most companies consider a high school diploma to be a requirement for employment, some companies hire entry-level junior traders who did not complete high school. These people must pass job candidate evaluations.
Junior traders are paid less than brokers, despite the fact that they perform many of the same tasks. In many cases, someone aspiring to be a junior trader sees the position as a stepping stone to a broker position. Brokers typically need advanced degrees in finance or economics, so many aspiring junior brokers get these degrees before applying for jobs with investment firms.